Time to go shopping?
Friday, December 26, 2008 at 07:50AM ..or will the time to year end be all about returns, as in selling?. This question will likely not be getting any answers on Friday as attendance will still be light and news flow weak.
...30...20....8...
Those numbers are the consecutive spreads of low to high on the SPX for the week. The market is simply trading, (if that’s what you call it?)..in a holiday mode. Well, we’ve made it to class to this week and the only potential trade in the makings, unfortunately has been hampered by the attendance.
Early in the week, we pointed out the E&P sector, known here as the Shales in particular may have been a potential buy -in after the sell- off Monday on already light volume. Any other time of the year this might have already worked out as a profitable trade by now as ‘ Heating gas’ (UNG) has been the only thing of interest even as Oil continues it’s slide the past 2 trading days. On Tuesday, Natgas strangely saw its best day in a long time, surging 8.5% to $5.74MM/. We were scratching our head as to why the E&P's were not reacting much to this at all for some reason. The low volumes/attendance was our only guess. On Wednesday, Natgas had pretty bullish inventory numbers compared to all the other inventory numbers (as stockpiles dropped more than expected). If demand is destroyed, why are these numbers getting bigger. Leading into Friday’s trade this is the only group we are coming for, hopefully this move in stocks is just lagging because the performance of Natgas caught traders by surprise. You can see by the UNG chart, it had a late day surge to weeks high (AH) after the 12pm data came out and E & P’s were still lagging. Maybe 1 hr before XMAS just ain’t enough. Besides low attendance, the reaction is in part to Oil continued decline and so this Shale move is in limbo. If we start getting a higher Oil by Friday, the Nat gas chart may help awaken a few that come to class.